In early European trade London rose 0.5 percent, Paris gained 0.3 percent and Frankfurt put on 0.6 percent.

“Ultimately, draining the economy of cheap money can’t be viewed as a positive for markets accustomed to feeding off central bank largesse. Why investors are so complacent is a mystery, but perhaps the reality check will set in midweek,” said Stephen Innes, head of Asia-Pacific trading at OANDA.

Greg McKenna, chief market strategist at AxiTrader, added that “traders continue to bet that the (Donald Trump) administration is refocusing on, and heading toward, some of the much-vaunted stimulus and tax cuts which were so much a part of the Trumponomics rally earlier this year”.

Pound kicks on

While the Fed mulls its next move the pound continues to shine against the dollar after the Bank of England last week indicated it would likely tighten monetary policy itself very soon.

After a big increase in inflation, governor Mark Carney said Thursday the chances of a rise had increased. This was followed on Friday by another board member signalling a move in “the coming months”.

Central banks are shifting from their easy-money policies as the world economy slowly improves, and the European Central Bank is also set to wind in its own stimulus.

The pound dipped back below $1.36 but is still sitting close to its highest levels since Britain voted to leave the European Union in June last year.

The dollar built on its gains against the yen, heading toward 111.50 yen.

Fears over North Korea receded soon after Friday’s second missile test in a month. While the launch over Japan revived geopolitical worries — especially soon after its provocative nuclear test — analysts said investors were calm for now.

“With the latest missile test we really didn’t see much of a market footprint at all,” Todd Elmer, Citigroup’s head of G10 forex strategy for Asia ex-Japan, told Bloomberg Television.

“What that signals is that investors are not inclined to extrapolate that provocation into any major flareup in geopolitical tension.”